New BofA chief talks well, must now walk

Brian Moynihan can talk the talk. He made a good impression on Wednesday in his first solo presentation since becoming chief executive of Bank of America at the start of the year. He hit all the right notes, promising to put relationships, risk management and cost controls ahead of rapid growth and serial acquisitions. That was reassuring, but hardly a difficult call. Walking the walk is his next challenge.

It was the penchant of Moynihan’s predecessor Ken Lewis for empire-building that landed the megabank in trouble and in need of $45 billion of emergency capital from the U.S. government. So the new chief executive is safe talking about consolidating the business BofA already has.

Investors shouldn’t forget that Lewis made similar noises soon after taking over the corner office from Hugh McColl, whose own habits as a serial acquirer in the 1990s angered a number of shareholders. But Moynihan has less reason to change his mind: as he rightly pointed out, BofA is now a major player in its core U.S. markets — retail banking, commercial banking and wealth management. And the former Merrill Lynch, though wounded in the crisis, is still a force in global investment banking.

Moynihan displayed a solid grasp of the intricacies of all BofA’s businesses, from capital levels to regulatory challenges to the finer details of its exposure to home equity loan losses. But it’ll take time before there’s enough evidence that his knowledge and experience are having the desired effect.

After all, investors remain cautious. Even JPMorgan, which navigated the crisis well, is only trading just above its book value — and its boss, Jamie Dimon, already had a reputation as a Mr Fix-It. Up to now, of course, saying the right thing is all Moynihan has had a chance to do. Next he has to show he can put it into practice.

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